GREAT WESTERN WILL CUT JOBS : CHATSWORTH-BASED THRIFT WILL LAY OFF 800 EMPLOYEES, CLOSE SOME OFFICES.

Byline: Gregory J. Wilcox Daily News Staff Writer

Chatsworth-based Great Western Financial Corp. said Monday it will lay off about 800 workers nationwide in an attempt to wring additional profits from its home mortgage business and increase its competitiveness as a consumer banking company.

The nation's second-largest thrift will take a pretax charge against earnings of $115 million to $130 million during the fourth quarter to cover associated costs.

The changes include restructuring the mortgage lending business through the layoffs, which will reduce the corporate work force by 6 percent; closing offices; upgrading computer systems; and implementing a new sales management structure.

The changeover is expected to take about 18 months, and 400 workers have already been told their jobs are being eliminated. More job cuts could be announced later, the company said.

About 85 layoffs will be spread over Great Western facilities in the Los Angeles area, but officials could not say how many jobs would be cut at its Chatsworth headquarters, if any.

Office space there will be reduced by about 25 percent through consolidating workers into fewer buildings.

In a separate action, Great Western will sell about $300 million in bad single-family home loans, the majority issued in California between 1989 and 1992.

``The object of these actions is to intensify Great Western's focus on achieving and exceeding a consistent return of 15 percent on stockholders' equity,'' said John F. Maher, the company's president and chief executive officer. ``These actions move Great Western toward our goal of becoming a more cost-efficient, full service consumer bank.''

Consolidating the mortgage origination business is expected initially to reduce the cost of these products at Great Western by 20 percent.

Some 20 mortgage processing centers nationwide - which evaluate and process loan applications - will be reduced to a ``handful,'' and many offices will be shut or moved into existing banking branches.

Jobs will be eliminated in the 25 states where Great Western does business.

The restructuring could add between $40 million and $45 million annually to the company's earnings by the end of 1997.

In September, Great Western executives told the Wall Street analyst community that some structural changes were planned. The company's stock closed Monday at 30-5/8, down -1/2.

Analysts generally agreed that Great Western is making the right moves.

``They stepped up and bit the bullet and took the charge in the fourth quarter of 1996. That will increase profitability in 1997,'' said Thomas O'Donnell at Smith Barney.

Last week, Great Western announced the sale of its student lending business to Richmond, Va.-based Crestar Bank. This deal will result in a pretax gain of about $23 million, thus offsetting some of the charges.

Thomas Theurkauf, an analyst at Keefe, Bruyette & Woods, said the changes make sense, but that a solid rebound for California housing prices would make a more substantial impact.

``While the economy is turning for the better, clearly the (housing) market in the south is lagging in the recovery, and that presents some challenges for Great Western,'' he said.

Great Western has assets of $43.5 billion, with 1,150 mortgage lending, retail banking and consumer finance offices nationwide. The company's principal subsidiary, Great Western Bank, is a home mortgage-oriented consumer bank with banking branch networks in California and Florida.